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Recessionary Pressures Bring About a ‘New Era’ in College Finances, Report Says

It isn’t news that the recession hit higher education hard, but a new report from the Delta Cost Project presents data about key shifts from 2007 to 2010 that the report says have “ushered in a new era in higher-education finance.”

The report is one of a series of annual updates released by the Delta Cost Project, an arm of the American Institutes for Research, a nonpartisan research and advocacy organization. Titled “College Spending in a Turbulent Decade,” the latest report affirms many familiar findings—reduced government support, cutbacks at colleges, and more of the cost of an education being borne by students in the form of tuition.

The report also includes a number of telling findings based on data from the 2010 fiscal year, the most recent available. Highlights include:

While enrollment was up across all sectors, public and private, the nation’s community colleges saw the biggest increase in enrollment among nonprofit sectors, with about 450,000 new full-time-equivalent students in 2010. That one-year jump of 12 percent was more than double the increase at community colleges in any other year during the 2000s. At the same time, community colleges saw the biggest drop among sectors in spending per full-time student on instruction, both from 2009 to 2010 (6.9 percent) and from 2000 to 2010 (10.7 percent). All other public and private nonprofit sectors raised spending on instruction over the decade, despite recessionary pressures.

While government support had been dropping for several years, 2010 saw it hit a new 10-year low, thanks to 2009-10 cuts averaging 9 to 13 percent at public four-year colleges and 15 percent at community colleges. Those declines, coupled with sharp tuition increases (5 to 7 percent at four-year public colleges), led to a shift in revenue sources, with tuition surpassing state and local appropriations at public research and master’s-granting institutions in 2010. The margin between state support and tuition revenue was a mere $500 per student, but it is a historic shift nonetheless.

Investment revenue began to recover at private nonprofit institutions in 2010, contributing to slight increases (1 to 2 percent, on average) in revenue over all. But private colleges continued to cut spending, including on instruction, by as much as 2.4 percent, on average.